43 min read

🎧 #122: Matt Ellis on The New Business Case for Decarbonization and Why Platforms are Vital

"Real estate owners buy and sell assets and drive yield. So we needed to reframe little "e", the discussion on electrons, and expand into big "E", environmental social governance. Doing so helped the real estate owner understand not commodities, but yield and risk in return."

—Matt Ellis

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Before we dive in, a quick Nexus Labs announcement: we recently launched the Nexus Labs Syndicate, allowing the Nexus community (as long as you’re an accredited investor) the chance to invest in startups together.

Episode 122 is a conversation with Matt Ellis, founder and CEO of Measurabl, the ESG platform.


We talked about Measurabl’s product, recent acquisitions, product roadmap, and why the platform approach is key for serving the ESG software market. If you nerd out, like I do, on decarbonization and tech in real estate, you gotta love listening to Matt.

A message from our partner, Tietoa:

After participating in the Nexus Foundations course, Sam Kovar is hooked on smart buildings. As an outsider, he sees a future where this industry can move forward faster with better communications. He wants to be an independent creative resource (15+ years of experience in strategic communications, creative consulting, and technical execution for video, animation, and photography) for helping the Nexus community connect to their customers and grow their audiences.

Connect with Sam by filling out this contact form.

  1. Nexus Labs Syndicate (0:33)
  2. Measurabl (2:08)
  3. CBRE (4:23)
  4. Hatch Data (10:11)
  5. Wegowise (38:58)
  6. Appfolio (41:01)
  7. From Green to ESG by Matt Ellis (58:40)
  8. The Billionaire Who Wasn't by Conor O'Clery (59:23)

You can find Matt on LinkedIn.



  • Measurabl’s founding story (2:10)
  • From "meter" to "market" (7:59)
  • Journey to decarbonization (12:10)
  • Point solutions vs. platforms (26:23)
  • Why M&A and the platform approach are better than interoperability standards (33:38)
  • Acquiring Hatch Data and Wegowise (38:58)
  • Using customers' data to make the solution better (50:06)
  • Where to from here? (53:26)
  • Carveouts (58:08)

A message from our partner, Butlr:

Occupancy data drives a variety of use cases across workplace experience, real estate planning and smart FM and is too valuable to be siloed in a walled garden. Every building and workplace would benefit from accurate, private, cost effective occupancy data accessible via API.

Listen to The Nexus Podcast with Rags Gupta, President of Butlr, on their approach to providing accurate API-first occupancy data at a fraction of the cost while not being physically able to collect personally identifiable information.

👋 That's all for this week. See you next Thursday!

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Music credit: Dream Big by Audiobinger—licensed under an Attribution-NonCommercial-ShareAlike License.

Full transcript

Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!

[00:00:33] James Dice: I'd like to introduce all of you to Sam Covar and his company, Tia Totowa, Tito, as an acronym for taking everything, take on anything. And after participating in the nexus foundations course, Sam got hooked on smart buildings and he wants to T a TOA, anything our industry can throw at them. As an outsider, he sees a future where this industry can move forward faster with better communications.

He wants to be an independent creative resource for helping you [00:01:00] guys. The nexus community connect to their customers and grow your audiences. He's got 15 plus years of experience in strategic communications, creative consulting, technical execution for video animation and photography. So connect with Sam. Use no link in the show notes and learn more.

[00:01:18] James Dice: This episode is a conversation with Matt Ellis, founder and CEO of Measurable, the ESG platform. We talked about measurables product, their recent acquisitions, their product roadmap, and why the platform approach is key to serving the ESG market. So if you nerd out like I do on decarbonization and technology in real estate, you gotta love listening to.

Before we dive in, a quick Nexus Labs announcement. We recently launched the Nexus Labs syndicate, allowing the Nexus community, as long as you're an accredited investor, the chance to co-invest in startups together. So check it out at the link in the show notes. Without further ado, please enjoy the Nexus Podcast with Matt Ellis.

[00:01:57] James Dice: Hello Matt. Welcome to this show. It's great to [00:02:00] have you on. Can you start by introducing yourself? Sure. Hey

[00:02:03] Matt Ellis: James. Thanks for having me. Um, my name is Matt Ellis. I'm the founder and CEO of Measurable. Um, Measurable is the world's most widely adopted ESG technology for real estate. We serve about, uh, 850 customers across 90 countries representing.

Two and a half trillion in asset value and some almost 14 billion square feet. All product types, data centers, office buildings, industrial corporate tenants, and we help them measure, manage, report, and ultimately act on esg. All right. Is

[00:02:35] James Dice: that all? Is that all buildings? You have? You don't have any more than that, so,

[00:02:39] Matt Ellis: So may I look around the corner and see if I can find one or two A shirt,

[00:02:43] James Dice: Oh, that's great. Um. So let's start with your background. I'd love to, I know that you were, uh, a broker at one point, uh, so background in the real estate industry, but maybe you could just take us through and tell us the story firsthand.

[00:02:58] Matt Ellis: Yeah, happy to do that. [00:03:00] So it's true. Um, maybe a lot of reform brokers don't like to admit it, but I was in the leasing business, uh, to starting in 2008.

I worked for C B E auspicious year for being in the real estate leasing business, the financial crisis. Uh, my job was specifically tenant reps. So what I would do is I'd go around and knock on doors to try to find tenants to represent and or lease transactions with landlords. And I did that in industrial properties.

And so I was working in an industrial park one day in the summer, East County San Diego, knocking on doors and I will never forget stopping under the awning of a building, uh, to get some shade and cool off. And I noticed on the door there was this decal and said, Energy star certified. And I kind of stared at and thought, what the world is this doing there and what does it mean to the landlord?

What does it mean to. I went back to my office that day and I wanted to try to look busy for my boss. And so I sat in my [00:04:00] cube and I remember thinking of things to kind of Google and I typed in energy star building and that was the first time I got an acquainted with the idea of green building. Okay. I, I'd had a personal interest in sustainability.

I never thought that that could be part of my professional life. Uh, but this opened a window for it and. Skipping over several years. I ultimately became the director of Sustainability solutions for CBR E. So that job was really a corporate entrepreneur job. I would create and commercialized services related to energy and sustainability.

Now, this is still early days. This is, you know, 2011, 2000, 12,013. The beginnings of the green transformation in real estate, uh, were, were, were glimmers out there. And I was able, and in a fourth position to see those early signs of this radical transformation towards sustainability and esg. Um, so that really is where measurable came from.

It was my wanderings working on energy and sustainably matters. It was my observation that this was [00:05:00] a revolution of, of extraordinary magnitude, and it was my other observation that there was just one problem is we couldn't measure it really hard to go out and talk to customers about where they were, how green or not green, where they needed to get to if we had no real objective measures of sustainability and that what measurable was designed to solve.

It was about bringing technology to bear, to measure sustainability performance objectively, transparently, timely fashion. And to bring that data and that visibility back to the customer and the market and allow the market to move and act more efficiently, um, for better outcomes for all as a result. So that's really where, where Measurable came from was that, that real estate background, that experience, and then recognizing some of these important trends and transformations and, and some of the challenges around that came with that.


[00:05:48] James Dice: Nice. And so when did you start the company? Uh, what, what year was.

[00:05:52] Matt Ellis: Yeah. 2013. The good old days. The good

[00:05:55] James Dice: old days. All right. Uh, and then fast forward today, you, you [00:06:00] mentioned all the, you know, different buildings you're in, markets you're in all that, Um, you know, can you, can you give us an update on how many people are in the company?

Like what, what is the company at today? Yeah,

[00:06:10] Matt Ellis: Yeah. It's kind of a fun, it's fun to fast forward. Look, I mean, James, we've been around 10 years. This is not a startup anymore. This is absolutely a scale of business. Mm-hmm. Those 10 years, there's a lot that happened. There's a lot that didn't happen in those 10 years.

I thought when I left CB to pursue this business that, that we were on the cusp of this transformation, that it was tomorrow. It wasn't exactly the case. Those first few early years, you know, trying to find a way. The first few customers, the first million in arr, the first 10 employees and so on, um, that was, you know, that was hard work and, and good work though.

It really taught me a lot about. Technology and building a technology company and meeting the customer need, um, I'm happy to not be doing that anymore. These days it's quite a bit different. So the answer to your question is we're now about a hundred [00:07:00] million dollars in venture capital raised. We have 275 or so people working for us across Europe and North America and some other far fun outposts and, uh, You know, the, the business now has gone from trying to build a, a really formative technology product to help companies measure management for sustainability, uh, to, to having a multi-product platform that helps them do all that, do all that better, and then ultimately, of course, act drive outcomes in their business around sustainability and drive ROIs.

And that's where we're at today.

[00:07:36] James Dice: Nice. Nice. And yeah, I wanna unpack, we're gonna talk about. Platforms, Uh, it'll be kind of in line with, uh, our mutual friend, uh, Pierre and I, and i's conversations around. Okay, cool. Around platforms. Um, he's gonna be on the podcast soon, so maybe he'll have like a response, uh, to this as well.

But let's start, You have this phrase that I love that I've heard you talk [00:08:00] about a couple times now, this, uh, from meter to market. Can you kind of unpack what you mean by

[00:08:04] Matt Ellis: that? Give me the date for PI session, William. Cuz I gotta, I can't wait to listen to that. You'll

[00:08:11] James Dice: zoom, you Zoom with show. Yeah. Yeah.

[00:08:14] Matt Ellis: I'd, Whether he'd like it or not, I'm not sure. So, um, let's, you know the question around Tomar, what does that mean? Um, it means a lot to us and maybe even the industry. So at Measurable Meter to Market is our catchphrase for describing. The product vision of the business meter, think of it, put it on on a, a line meters at the extreme left and markets at the extreme right?

Okay. Meter represents all the in-building considerations related to sustainability. It's about real time data capture from boilers and chillers and HVAC systems to make sense of the building's operating health. It's about indoor air quality and anything else that's going [00:09:00] on mechanically or operation in that asset.

Moving from meter kind of towards market. The next major stopping point is outside that asset and into the portfolio of assets. So we're getting from the systems to the building itself and from the building to the many buildings that typically fall in the real estate portfolio. That gets us to, um, all these other concerns, regulatory compliance.

Not that that doesn't happen at the asset level, but a lot of that now is increasing at the entity level. Think of the new SEC proposed rules. Think of the sustainable finance exposure regulation in Europe. Net zero target setting, while that ultimately rolls down to a building. When we talk about that in the industry, we're typically talking about something that's being done at the entity or portfolio.

And many other examples, policies, procedures, around sustainability. There's limit at the entity level, so Meter is building, building systems, and getting towards market. [00:10:00] The next major stop, the portfolio is more like the boardroom. Okay? Measurable is delivered to products against those unique experiences.

We acquired the business of Hatch about 120 days ago, which had a brilliant solution for bringing in real time data. Hardware and buildings and liaising with that and delivering recommendations to make that thing better. Principally, we focus here on energy and carbon reduction measures among others.

The measurable core product is solving then from those assets out to that portfolio, regulatory compliance, investor reporting, targeted setting, physical climate risk exposure, and many other things, but that those two products have so far only gotten us from meter to boardroom. Still gotta get to market.

What's market and what do we do there? Market is everybody else. . It's everybody besides the owner or operator of that box. It's the JV partners, it's the LPs [00:11:00] that invest in the GPS and funds who then invest in the buildings. It's the debt that powers the real estate business because most every building we look at, um, when you walk up and down Park Boulevard and Main Street, uh, It's got a loan on it.

What about all those other stakeholders? How will they perceive and understand and work and transact with sustainability in mind? Here, Measurable has brought to bear a data product or actually a set of products. So we have what we now call asset optimization at the meter level and measurable core at the enterprise level.

We've got listed real estate products and asset level products. These are API based services that leverage the data. We've amassed, we aggregate, we anonymize, and we create novel new statistics that help all these other stakeholders. Measure and, and transact on sustainability. And that's a, a another first mover product.

No one else has [00:12:00] delivered anything like that. This suite of products now is the, is the product delivery against our product vision of meter to market. Got it. Hopefully that makes sense. That's what it all, Yeah.

[00:12:10] James Dice: Yeah. Makes perfect sense. Um, so when you talk about, or when the industry talks about, say, decarbonization, How does, Will you just walk us through from meter to market how this concept of decarbonization shows up for all these different stakeholders?

And the root of that question, right, is when we think about technology and for energy or techno, like the history of my career, your career technology for energy hasn't always hit and and served all those different stakeholders. So can you talk about just. How all of these different stakeholders are sort of experiencing decarbonization and how that differs as you kind of cross that spectrum.

[00:12:50] Matt Ellis: Monster question, James. Thanks. You're, you're welcome. So this is the failure in the market, right? It was the lack of [00:13:00] transparency. I could still have done one thing. I'd say it's, it's a lack of the ability to measure sustainability. And it's the, the inability to then distribute that objective measure across this whole experience of stakeholders.

Right? Um, now what does that mean specifically, right? If I wanna start in the middle back, we just talked about the metered market vision. We talked about measurable, sort of core product for helping portfolios of real estate, whether institutional or corporate. I'm sitting there as, as maybe the CEO and I'm calling out now some new net zero target.

That doesn't happen at the, at this amorphous portfolio level, what happens is somewhere way down in there, a light bulb got changed or a boiler got swapped out, right? Or a thermostat got adjusted. New operating procedure building was recommissioned, whatever. So I need to, to join the executive decision making the overall targets and aspirations.

All the way back to the studs of the building. [00:14:00] I have to do that. I cannot have those live in separate experiences. It was not okay to have an enterprise product and lack an asset level or meter level solution. That's why we did measure what we did do to bring those two together. But it is also not the case that buildings are actually the real estate business.

I'm fond of saying buildings are not brick and mortar, they're debt equity. So you cannot have decisions around carbon reduction, which ultimately are capital decisions without having the capital, the debt equity that power those portfolios. So how do we make that happen? Again, you see us move into this data, uh, business to provide the connective tissue.

Between equity investors, sovereigns, endowments, pension funds, and the like, debt providers, banks, and non-bank lenders, so they can understand what the exposure of their portfolio is by way of carbon or health and wellbeing. [00:15:00] If the capital is not informed, it won't move. To greener assets. Can't move to greener assets.

If we can't attract the capital, we can't drive the greener outcomes. So it's a bit, you know, I have two kids and talk about how the body's all connected, right? All the rest. It is like that in real estate when it comes to this issue of esg, we must have. Governance that must be made transparent. The incentive to make the the executive team invest into carbon outcomes and reductions that must be made transparent at the asset level and at the capital markets level.

And we need to move the money. Between these real world wrench turning outcomes and the investment decisions way upstream from that. That's the task. Mm-hmm.

[00:15:47] James Dice: and just for the people that maybe came from the technology or the energy side and don't know how the general, you know, real estate industry works.

If I gotta replace a chiller, for example, or I gotta electrify [00:16:00] my heating system and I gotta spend 10 million in this asset. Will you talk about how that decision gets made and like where the funding comes from and how it connects back to those investors? Just maybe some mechanics would be helpful for people to

[00:16:15] Matt Ellis: illustrate or doesn't get made right James?

Like that's, Yes. So I think there's a common misconception. So remember we started this conversation off by me talking about how I was in real estate business as a real estate broker. One of these like, Very transactional traditional roles in the real estate business. And I sat next to the property managers, what none of us were.

And what the real estate business is not is an energy management business. We're not the commodities business, but strangely, our largest controllable expense for most buildings is commodities like energy. So it is not our business. Our business is real estate, but an ingredient of that business and a significant one is energy.

So I think one of the major breakdowns that's occurred is people have come at. With solutions to an [00:17:00] incorrect problem statement, like, you use too much energy and you actually care about that. The real estate owner was confused by this, uh, presentation, right? What they do is buy and sell assets and drive yield.

So we needed to reframe little e the discussion on electrons, and we needed to reframe that and expand into Biggie environment as an environmental social governance. Doing that helped the real estate owner underst. Not commodities, but yield and risk in return and it goes like this. Your question on the board that a mechanical change out is like, I need to sell this asset one day, most likely for many funds and get a return.

Mm-hmm. if my return could be diminished because it's a less sustainable. Right. It has a carbon footprint of X, and that's poor performer, or it's exposed to regulatory fines and penalties like New York local law 97. [00:18:00] It makes it less sellable and probably means lower asset. That's where you find. The alignment we had to move from electrons to environment and in risk and reward at the asset level and the buy, sell for real estate to truly begin to care and move on this issue.

Here's a few other complexities by the way. So that's a big sort of major reframing and transformation the way we thought about ESG and the real estate business as it moved from little E to Biggie. The other thing we did, We need to embrace the complexity. I'm glad you're talking to Pierre cuz this is the master and complexity.

When we talked about I have a shining new light bulb or, or, or variable fan driver, whatever the mechanical system was. Shouldn't you just change the building out the real estate? Uh, owner was thinking about, Well, my building is a hundred percent leased on long-term leases and I don't have any vacant, There's no intervention I'm doing today.

Hmm. You need to understand the real estate life cycle. [00:19:00] Am I an opportunistic investor who's going to re freshly bought this asset and will reposition it? That capital expenditure? That is the time. For interventions around these other things. It's trick to do retrofits, especially a deep retrofit if you have a solid tenant base that's not going anywhere tomorrow.

Yeah. There are also these other things, which is what are the least considerations in my economic relationship have I built in the incentives for me to invest and for my tenants to maybe co-invest. Through amortization and lease around energy efficiency that ultimately accrues to them and not me.

Right. In terms of cost saving, so that this is your functions of things like not lease structures and so forth. Mm-hmm. , all of those real estate considerations were, I think we started to miss the plot. We need to bring energy and sustainably back into the real estate business. Talk about the real estate life cycle, the whole period of the funds, the nature of those funds, and understand that perpetually so we could spot the opportunity to make a change in that building when it made sense for the real estate strategy.

Not cause the light bulb was [00:20:00] necessarily better in and of itself. There was a bigger picture we were. Got it.

[00:20:05] James Dice: Yeah. And then I'd imagine that when you're designing a software product, you then need to do exactly that, which is reposition. It might be a data from a utility bill. Right. And reposition and put it in terms that the real estate stakeholders care about.

Can you give a few examples of how. You know, in the old world it was, I, I've done energy benchmarking and I'm gonna show my, you know, portfolio manager score, Right. That my, my, um, energy star score. So what are the new ways in which data can then be transformed to then provide the information that the, the real estate, uh, stakeholders care about?

[00:20:44] Matt Ellis: Sure. I mean, that's, um, I mean that is where you begin to have the business of measurable, right? It comes to life. The first thing I would observe is you needed technology there to have a persistent experience with the real estate owner for all assets [00:21:00] all the time. Mm-hmm. , because if you just dropped in, I'm a solar vendor and I have, um, a panel for your rooftop and I'm trying to match that to incentives.

I'm taking these point in time shots to try to understand your building and see whether or not I can make sense for. It's much better to understand the portfolio persistently because out of that then it's working backwards at any given point in time. Because I have technology to have a point of view into my buildings and portfolio, I might then be able to see the opportunity for an intervention.

It does not go the other way. It is not, I have an intervention. I hope it works for you. Conveniently, at this moment in time, it's, I have a portfolio and I might be able to absorb and invest in interventions based on my strategy over. Big difference. So that's the high level statement. The, the second one on your question of Getting, for example, from like a utility bill into like a real estate problem statement. Right? Exactly. So let's use that, right? Let's say like there's this utility bill, I'm trying to remember the last time a [00:22:00] decision maker at the portfolio level, let alone the executive suite looked at any utility bill made decision, right?

The best you might have gotten from that is a property manager who's doing budget variance reporting. Yeah. Yeah. That was really it. There was no decision making. So when we take that utility bill, Among other things in the building, what you're trying to do is get that back to this sort of risk reward profile for the assets value.

To do that, we're gonna have to talk about things that affect overall asset value. Energy is certainly one, but there is this core there right now called carbon. That's the easiest one to talk about. The energy in carbon, double whammy or piston. And carbon intensity per square foot is where you can start to get like someone's mind wrapped around this.

It goes like this. If I understand that I have, um, dollars per square foot lease rate, I can also understand that I have carbon in per square foot, carbon [00:23:00] intensity, and I can compare that. I know if my building is better or or worse off than other buildings in my portfolio and perhaps buildings across the street from me.

This is like the DNA of real estate. When I was in brokerage, what we would do is we'd go around and try to understand quote market, What is the building across the street versus the building I'm looking to lease? What is the fixed income? What are the amenities and value that asset that make me wanna pay more or less?

It's all about the. Michael Mandel com stack, right? It's all about the comp, and we had no environmental comp. So the place by technology can go from that little utility bill is to roll that up into this thing called carbon and energy intensity, to then put that in context of market, right? Which is other buildings like it.

Now you have something that real estate professionals can work with. They can bring that into their underwriting or their recommendation and say, This building is better or worse. [00:24:00] Based on a full spectrum of concerns and we can make decisions from there. That's how you get from Bill to kind of more like broker and ultimately to boardroom.

Um, it's, it's a little, it's another version of that e little e to big E move that we have to

[00:24:17] James Dice: make. Beautiful. Yeah, that's exactly what I was, I was kind of getting at is how do you, Yeah. What is the life cycle of that one data point, and then how does it sort of travel throughout your platform? It's,

[00:24:29] Matt Ellis: let's, there's, there's a few.

I feel like we do talk a lot, like our industry talks a lot about energy and carbon. I just do wanna point out there's so much else that we, we can factor in to get competitive advantage right now. Um, climate risk. Transition risk. These, these ideas of, um, the physical world's impact on the building, flood wildfire, hurricane.

And then there's also the notion of the changing preference of customers and regulators, all the rest and their impacts. And, um, that is [00:25:00] now becoming very material. I mean, we just saw, what was it, Ian Roll through Florida. There's an. Um, doubt that there are a lot of industrial warehouse owners with buildings that are not taking in goods and services and are disintermediated by that.

So that's one more example of, um, and where does that impact us? It's not just like there's fine across that building. What happens actually is that there's this insurer. You're a policyholder. You have a premium to pay in order to collect a payout of something. Mm-hmm. building. And that equation is changing cuz of this thing called climate risk and transition risk.

So there it is. It's about insurance, it's about the comp, it's about the access to capital. Give you one more and we can move on. Securitization brain bonds. If I as a entity, Boston Properties can issue 1.8 billion in green bonds. I think it was 2021, which is exactly what they did, and I can carve out just a little bit of a coupon rate discount.

[00:26:00] That is a, such a different economic impact than any number of light bulbs I might change downstream. So the, here again, we're seeing sustainability move the needle on insurance access to capital debt, right? Mm-hmm. , uh, and also the buy, sell and the leasing decisions. That's the real estate business.

Awesome. So

[00:26:23] James Dice: we've been talking about platforms a little. I'd love to. You and I have had a discussion on point Solutions and point solutions transitioning into platforms. Can you just talk about that sort of transition from your perspective and maybe even the perspective of your clients? I think you said to me last time we talked.

You don't think building owners are gonna buy platforms or point solutions anymore. It's all platforms here on out. So can you, can you sort of expand upon

[00:26:49] Matt Ellis: that some caveats? What I was specifically referring to is within the category of esg, I, I think what we've seen with the rise of regulation and the [00:27:00] maturation of investors in the sophistication they're now having around this is, um, the game is too serious.

It would not be viable for me to bring out measurable as a, a GRE reporting tool, uh, pure and simple. And 2023, right? We needed more. We needed a full complement of tools. We were just talking about climate risk. That needs to be, uh, Uh, intimately tied into, in my investment reporting capabilities, which need to be intimately tied into my asset level, uh, investments and CapEx and decarbonization and, and around it goes.

So I, my comment was specific. I think we'll have an appetite for innovation and real estate that that gens out the bottle for prop tech. We wanna find ways to, you know, combat the compressed margin, and technology's a wonderful way to do that. But in, in esg, I think we saw a incredibly rapid move from experimentation and point solutions to platforms.

And that's why you see me doing what it's doing, which is [00:28:00] our, our vision for meter to market is extremely expansive. We're talking today about all the stakeholders loan I, continuum and insurers, lenders, investors, operators, occupiers, so on, and that calls rate sophisticated and, and interconnected.

Platform. Um, what we are seeing then is yes, there are other solution sets. Let's use indoor air quality. I do not see that in the long term as a separate and distinct consideration from broader esg, and it should and will achieve its greater value when we have it in context of building operating procedures from asset optimization.

So we know what's good by way of energy and what's good by way of indoor air quality because they're tied together. It takes a lot of energy to bring and refresh a lot of air. But that might be the prerogative and the standard of that tissue inspire of Boston properties for their tenant base. So I think you have to have that together.

That's really the point. [00:29:00] That's why I'm so intent on building out, um, the most rich and expansive platform when you do that. Make sure to be mindful that there are different personas along the way. There are these energy engineers or facilities managers, they don't know a wit about the SCC compliance report that the CFO has to put out.

They just need to know or be able to communicate the data from their assets up into that report. So building a platform is not about having separate products that communicate. It's about having, uh, personas and experiences around areas of expertise and, and need. And that's really what I think of us is building.

Nice. Nice.

[00:29:41] James Dice: Yeah, and that aligns perfectly with a lot of my thinking and writing. I've written a lot about how I don't like the single pane of glass. Yes. Acronym The SPA thing. That seems to be it. It's, it's very, very prevalent, uh, in a bunch of different pockets of the industry where people act like spa [00:30:00] or single pane of glass, like the gateway to everything basically.

But I, I totally agree with you, where it's, it's all based on individual personas and their workflows and the ability to have, you know, one underlying data platform. And the ability to serve different applications, different workflows to different people. It sounds like that's what your strategy is really with this platform that you're, you know, giving API access to, to basically anyone that wants to pay for it.

And then there's these different applications or different products that sort of sit on top of that.

[00:30:34] Matt Ellis: That's right. And it's a lot of this same logic, um, James, that you're referring to. We see in many other industries, right, as we mature as an industry in our consumption technology, there is a strong pull towards rationalization and consolidation of those related tools.

So emphasis Oned yet is a big, one of the reasons platform makes sense in the SG is a very encompassing, horizontal sort of concept. We just talked about how many stakeholders and. [00:31:00] Aspects of real estate business touches. So there, there's a very particularly strong incentive to bring that data together into your single and glass.

I think we can also rinse and repeat this from other angles in the market that make us want to have this capitals global, measurable sort of buildings in 90 countries. We're launching our first language translation of German, uh, in November. Spanish Italian. Follow Japanese. Well, why? Because the capital is going into buildings all around the world.

The JD partners are going into buildings all around the world, the, the investors deploying into, you know, it's nor just and audio are deploying into American funds and Middle Eastern Asian funds and TA's investing here, right in this state. So you need to have a platform both with respect to the set of solutions.

But also with respect to GOs, also with respect to segments. So measurable works in [00:32:00] uh, yes, real estate, existing real estate assets and funds, but a lot of our customers have credit. Businesses too, and they're lending is non-bank lenders into yet other real estate vehicles. So you need to have solutions for that because there's still just this one customer at the end of the day back there that's doing multiple strategies and multiple markets.

So you see now, when you look at it from a core solutioning, geo, and segment. Perspective. You see that again, the body's all related. You need to have a platform and a single I you say single pan of glass, which is totally right. I say single source of truth, right? Mm-hmm. , there still is one building out there with one real carbon footprint.

Right, Right. What looks up from a different perspective? Totally.

[00:32:50] James Dice: Well, you've talked about the importance of occupancy data over and over on the show. And the team at Butler would like to reinforce it. Occupancy data drives a variety of use cases [00:33:00] across workplace experience, real estate planning and facilities management, and is too valuable to be siloed in a walled garden. Every building and workspace would benefit from accurate private cost-effective occupancy data accessible via API.

So go to www.nexus labs online slash 0 9 1. Or click the link in the show notes to listen to nexus podcast, episode 91, with my conversation with rags. president of Butler on their approach to provide accurate. API first occupancy data at a fraction of the cost while not being physically able to collect personally identifiable information.

[00:33:38] James Dice: What do you think about, So I did this poll on LinkedIn. Uh, I like to do these sort of provocative sort of open-ended questions on LinkedIn. Cause I just like to see what people think. Um, everyone knows I'm kind of stirring up shit, but it's still fun to see what, what happens.

Um, so I asked the audience, I said, um, what do you think is gonna solve fragmentation in smart [00:34:00] buildings and decarbonization? And I said, Is it m and a? Is it interoperability? No, I said interoperability standards was A, is M and a B, and then I said C. Put your answer in the chat and I'll tell you, Matt, there were like 50 comments.

And not one person, or maybe one person said all of the above, but not one person singled out m and a as like what they think is gonna solve things. And I, I'm obviously, I do this quarterly podcast on m and a because I think it's super interesting. You've done some acquisitions lately that I wanna talk about.

Um, so I'm wondering what your reaction is to that, that, uh, pull and, and sort of what you think about sort of m and a for solving these different, Cause really what you're talking about is solving. A fragmented industry so that the user journey, um, you know, from where they're at now to decarbonized building or whatever stakeholder, you know, whatever stakeholder's, user journey you're talking about, you're talking about having one product kind of [00:35:00] help them along and that journey, um, So you're trying to accomplish the same thing, just going about it from, uh, you know, you're building your own products, but you're also acquiring others to sort of get to that point.

So how do you, how do you think about that?

[00:35:14] Matt Ellis: Okay, so on the question, this is the one where the, you know, you say, Hey, I, I, I take issue with the question because I, I think you said boars and I would just like to say ants. Like I know this about an all solution and m and a and platforming. And transparency in data and consensus around what things we're measuring and what the relative prioritization, which has a big industry component about getting to some degree of agreement about that.

There is two days still not a consensus on exactly how we ought to measure a portion carbon. There's the GSU protocol that tells us technically how to it, but then there's a lot of folks that say, Oh, I don't, um, I have a net lease. I'm not really. I may own it, but I don't really control it and maybe I shouldn't gotten hooked for that.

Um, and I'm not gonna report it at all by the way. [00:36:00] Uh, cuz I don't think it's actionable. So there's still a lot of, um, diversity on the, uh, foundations of how we ought to measure and then ultimately act on esg. So I, I think it's a lot of ands when need consensus. We need technology. Platforming and integrations was one of your points and I can completely agree with that.

And we need, um, consolidation. Uh, and, and in the best possible way to provide a simpler user experience that supports the most other stakeholders. Um, so that's my response to your, your question. And then as it relates to like your other piece on like what's specific then the role of m and a in it. Look, we measurable, but we prop tech, uh, have grown up quite fast.

I mean, we're really talking about a decade. Of radical change, cultural change and investment has been brought to bear. You whole venture [00:37:00] funds, crop tech venture funds, Cameron Creek is awesome venture fund to back this in our series A, you of course have the notables like fifth wall, a crop tech, and many others.

They've created the firmament and the wherewithal to do big things. Which is really cool and time to fun. And at the same time, you have a willing audience. The real estate industry has gotten a memo. We do need to change. We need to change to become more sustainable. We need to change to be more, uh, digital, to have a better customer experience for our penance and for our investors.

Um, so there's a lot that's happened in, in 10 years. Now it's time to do that . So the onus is on the entrepreneurs out there to bring a bold, big. Against a known category and problem statement. Ours is esg. And to not do that incrementally, I do not believe, while of course, measure launches, every month we launch a new functionality, agile process, just as you expect.[00:38:00]

That is not anymore. All we do. We will absolutely be acquiring more businesses and thoughtfully bringing them in to fill perhaps white space that can't be productized fast enough to meet the customer in need. Hmm. Or to take us into segments and geos, geographies that the customer needs to be serviced in.

Um, and, and, and you have to, that that's no different. I think to me it's another school. It's a tactic. Against the imperative of bringing full value to the customer. If as a company you cannot or will not do that, I do not believe that will be competitive in the category. Mm-hmm. , It's fine when you have a new novel niche, um, that's figur its way out.

But the second you have a category, you have a dominant and clearly spoken need. You have to be able to wield m and a otherwise market. Fascinating.

[00:38:57] James Dice: Fascinating. So we've talked about hatch [00:39:00] data in the m and a category. Will you talk about WegoWise, which is a little bit more recent, um, and some people might be listening to this podcast in two years, So then it won't be recent, but I'd love to hear your, your thought behind the wego wise, uh,

[00:39:15] Matt Ellis: acquisition.

Okay, cool. Well, if they're listening in two years, maybe we should tell 'em what these businesses are. So recall that hatch and they're interest, they have, they share those. The common thread here, Hatch came out of inter. And now purchased Intero. This is the energy intelligence software of Interop, which is a publicly traded company and had a big business and demand response.

And Hatch had the benefit then of significant investment and actual exposure to actual buildings and actual data, billion operating hours of building operating hours to build models to then ultimately be good at recommending what to do to improve those assets. So that was the business of Hatch required, and we have branded now in place as F optimization meter level legal wise has.

A little bit of an inverted story of that they were a startup. [00:40:00] They came out of servicing affordable housing specifically, and their business was, um, providing benchmarks and utility automation to, to that segment. They were, I saw them first way back in the dark ages when I was at CBR e. And I thought, Wow, this is a very cool business.

They're providing this energy and carbon benchmarks. Carbon was beginning to enter the lexicon. Mm-hmm. , they were doing this at the unit level, so residence apartments. They had a, a offering for single family residential and so they were very more retail oriented where I came from, the institutional real estate side, and I thought this was just very exciting and compelling technology and the right idea.

For the wrong time. This was back in 2000 and ok. Yeah. In 11, we hadn't involved our jargon and identified these bigger esg. In fact, ESG wasn't a term of art. They were acquired by a public company, so they didn't get, they didn't come from a public company. They acquired by a company called that [00:41:00] Folio At Folio saw the promise and pieces, their technology.

And when the time came to to do turn that into a business for them or not, they made the decision that it wasn't gonna be the type of business they wanted to be in, but it had become a business for folks like ourselves. And so we had the relationship there and established ourselves, the brand that made that a great partnership to have.

So what results from this acquisition is that several things, legal wise, as I mentioned, serves residential real. As you've been following this conversation, you've been hearing me talking about data centers and office buildings, measureables, commercial real estate solution. We now have the ability to authentically serve res or excuse real estate.

No more preface of residential or commercial, just real estate. Really big deal. It's big deal for things like this. Institutional money is moving into single family homes. These are [00:42:00] these platforms. Uh, Invitation Homes invented the space, the pre team, and Jen and, and many others. Um, that will continue and as institutional money comes in, they're gonna carry with them.

And the many concerns of affordability, of Environ impact that we are in the business of helping with. So residential is absolute place. It must be, we must be a genuine real estate platform with no limits. If it's a structure baseball stadium, major league baseball. Great measurable customer, uh, single family home, yours of mine, great.

Should be a measurable customer on a platform being benchmarked. The second thing that Wego Wise had was very unusual, but a core element of their business was bringing in utility information to benchmark these buildings. They built, uh, in a very forth sided way, uh, a utility automation infrastructure backbone.

Templates that can automate and capture utilities, bring [00:43:00] that in a whole suite of technologies to maintain that infrastructure, uh, quality, assure that data and so on. I think this is in a tremendously underappreciated piece of that business. And now what we are able to do then is, is feed our platform with a proprietary and vertical solution all the way down to the utility as well as with a hatch now down to the meters or submeter and systems level.

So you have ground truth. From bills from systems, that's a powerful combination. That means our customers get a better experience. Higher quality means we control the business model, but it doesn't just benefit us. I think one of the things that you do when you platform is you need to make sure you have an ecosystem and you need to make sure you add value to all those ecosystem players and partners.

So one thing I envision doing with this is that API and that technology should service all our partners. It should allow unfettered access to raw data. I believe in adding value to data. I'm not really [00:44:00] gatekeeping, uh, primary source information. It's not ours, it's the customers anyways. So we might have a clever tool for getting it outta shovel, but I really believe in letting that data breathe and letting the customer direct it to where they want it to go for the best outcomes.

And those outcomes will not be solved no matter how big measure can get and how many business you acquire by as a loan, it must be solved by a c. And our job and our, our responsibility is to make data available to the community as the customer directs us. So utility data is an example and they have this infrastructure that I intend to make available, not just for us, but everybody else that wants to play and add value.

Mm-hmm. . Yeah. Third, just, you always have gotta have threes. They had, we go serve 1.6% of US apartment units. This phenomenal. I mean that, not to say there's not. 98.4 is still to go, but my goodness, for a relatively small business, um, [00:45:00] to, to get that type of adoption is very impressive. And it happens to be in a place that we really had capacity while we've done good work and getting visibility on commercial assets.

Um, and by we, I mean government measurable, many other business. Residential would really opaque. Mm-hmm. and Wego had a very rare ability then to access data and to provide and provide and build a resilient database around what sustainability is in that segment of the market. So I think that can help us build better transparency and more tools, um, for people who wanna invest there, rent there, right?

Mm-hmm. group, those buildings as well. Yeah. So,

[00:45:42] James Dice: Yeah, I like the rule of threes as well. Anyone reads my writing? Uh, I'll never use four and I will never use two of anything. Yeah, it's either gotta be three or five bullet points or numbered lists. Yeah, totally. Hundred percent. Um, so I wanna just real quick, [00:46:00] uh, a couple minutes left here on the data platform.

Um, so that's kind of what you're hitting at here is the ability to expose metrics, data, raw data, data access, all of this. Can you give a couple examples of other businesses that might be building on top of your data platform? Like what kind of use cases, uh,

[00:46:20] Matt Ellis: you're, you're thinking about there? Of course.

So, um, We've got a multi-product platform. We have internal APIs into those products, and we have external APIs. Um, let's start with the core product. That enterprise product, there's a bidirectional API on that you can both read from and write Two people that are writing two Yardi. A lot of our customers use MRI or already, or some building engine, some other operating platform, asset management platform, property management platform.

And so the there, back to that statement, there's just this one building. That building may reside in some other [00:47:00] system and the customer likes it that way. So let's not duplicate work. So let's have those entities right to measurable. That's also nice cause you wanna keep, there's, there's also just one portfolio.

You want, uh, one answer for what I own, where it is, what the status is across all my. Applications of value. Mm-hmm. the writing to Measurable. Who else writes to Measurable RealAge? Right? A large UBM company, utility bill management business with a whole range. Value propositions. They can write portfolios of real estate IME so that customer can then have a single sign on and enjoy a quick and easy ESG experience.

So we're adding value to whenever we're getting more customers, we're um, getting data faster and onboarding faster. And real PACE customers are getting more out their data. Yeah, that's great. So that's power of APIs in an interneted ecosystem. So you can. Right to, you can read from our customers are developing sophisticated digital strategies that are bringing [00:48:00] together leasing data and ESG data and, and, and they're developing market intelligence around that.

Those data warehouses are places that we need to send that data programmatically and the customer can put a Power BI or some tool on top of it and go off and and innovate. So that's an example of what's already happening in terms of both read and. How about other third party technologies that consume raw or semi, you know, or refined data for measurable to power their tools.

So not just the dumping it into a data warehouse with an overlay, but think like building engines out in Europe who wants to help customers with. There's so many things that reside in me that we can support other interesting companies and partners with the single power of. And right? Mm-hmm. , that's the core application.

What about the data products that we've offered, which are themselves? There's no UI on those. Those are API products. So if you go to measurables website and you look in solutions and you'll [00:49:00] see, uh, data, you'll see a drop down there. Now we navigate to it for a variety of APIs for partners, like I just described, for a core system, uh, for customers, and then for consumers of data products.

And that's a read, uh, business and it allows them to. It allows 'em to post addresses and building characteristics and get, um, statements back about regulatory exposure or certification status, climate risk and energy intensity and so forth. So these are very, What's also great about all this is it empowers a conation of value.

It, uh, allows customer to do so much more with a single source of truth or data, and it's incredibly, So the big picture behind our conversation today is that there's a problem with the climate. There are social inequities. The real estate industry has a stake in this, and we need to go so much faster than one building at a time.

We need to move trillions of dollars [00:50:00] around scalably, and you're gonna have to have solutions like this to do that. Mm-hmm. . Yeah. Okay. Last

[00:50:07] James Dice: piece of the platform, uh, equation, right? Is one of the things I like to nerd out on is network effects, right? So the, the ability for a, um, someone to build a product that then gets better when other people use it, right?

Um, Can you talk about the network effects between all these different stakeholders that are using the platform, putting data in, taking data out, and enriching the data set. Um, how, how does that work? One example, I'll just throw one outta one example is when you guys have more buildings on the platform, you're then able to do better benchmarking because you have a better data set.

So the fact that you have more customers coming in makes the, you know, n plus one customer, their insights are better. So can you talk about how, how you think about. The network effects that the platform approach takes.

[00:50:52] Matt Ellis: When the business started, we worked with our first customers to share, to, to bring the data in and [00:51:00] allow us to create, We put a mask over that we aggregate, anonymize, mm-hmm.

but the one of the, to share that data and to then be able to benchmark each. Now our customers can't zoom in and identify that that's Boston Property's building, Orian building. But they can understand for a like kind asset in the same zip code, for example, same size types of age built what relative performance is.

Transparency is the best. You know sunlight's, the best disect in here, and we have an environmental externality in the business. This is a way to bring transparency to that and our people move. When we did that, the problem statement from industry was, we can't benchmark, we cannot understand our, our greenness.

Even if you told me my carbon and how, I didn't know how good or bad that was. I can't wait around for a year for, you know, sort of various voluntary framework to give me a, a backwards looking statement from sort of a black box. I need a transparent model and I need a visceral real time [00:52:00] response. And so was the problem statement the customer led us to do.

We have worked with our customers to make a better product. And we all understand that it is in everyone's best interest to grow that data set to merge essentially to what market truly is. I mean, it's just statistics. The larger end gets right, begins to converge with what the actual statement is, and that's what medical's been able to accomplish For markets like New York and LA and we have a lot of institutional real estate, we have such substantial footprint that we can actually give more or less ground truth.

Hmm. Now the markets can. Now they can understand relative performance assets and quality of assets. And now the best ownerships can go out there and compete on the, that, that, uh, information. So that's where benchmarking is absolutely a great example of we continue to improve and advantages that are gained compound as you get more data, [00:53:00] begets more data.

Cause people wanna build a benchmark and compare to market. Beautiful.

[00:53:06] James Dice: Yeah. And, and people talk about platforms a lot. It's like single painted glass is my biggest pet peeve. And then like, platforms are my next biggest pet peeve because, um, when people say I have a platform, I always ask like, well, where's what network effects are there?

Um, and, and we, you can get into the argument of what's a platform and what's not. We won't do that today. Um, but, um, I think I'd be remiss if I didn't ask you my last question, which is sort of where to from here. Um, you don't have to tell us who's gonna, who's gonna be the next acquisition. Uh, that's probably too much to ask, but, uh, where are you headed from, from here?

Um, as you think about building the platform out further

[00:53:47] Matt Ellis: by, and by the way, you're absolutely right to call that out about platforms, right? It's a, it's, we've got a lot of jargon and a lot of it's overused. Um, My pet peeve is green, right? Like green doesn't get rid [00:54:00] of that one. And I wanna get on kind of ESG and real objective measures.

So it's, I think that's fine. And you're right to observe that platforms have some, some notion network and virality to them. They often are, are multi-party. So we talked about benchmarking and the value of people contributing data, but what about the value of being able to buy and sell buildings and carry that chain of data and that chain of custody over to the new ownership was on that same platform?

Mm-hmm. , what about the value of the LP being able to come in and liaise directly with you? So there's no middleman between your conversation around financial and sustainability performance. You can speak directly with the LPs who can be on the same platform and get visibility across GPS and SoCo. So I, I really think that that's so critical, measurable, one to cultivate that and nurture multiparty multi-product.

And so, uh mm-hmm. all leveraging that, my words, single source of truth, right? So yeah, that in terms of what's next, I think we've done a really good [00:55:00] job today, James. It's sort of like hauling out and I, I'm very proud. Every year I sit down on LinkedIn, I try to pre-write it cuz I published it on January one if I do my job.

Um, and it's hard to get much work done in the first of the year, after December 31 and I lay out our business. And I talk about what we will try to accomplish this year, what markets we'll move into, what segments we will pursue, what product, major product advances we will attempt to make, whether we'll raise capital to do all that.

I like to talk about transparency and try to live as a business. So today we talked about our strategy. It is exactly as we described, platform, the business, multi product, multi segment, multi geo. It is to use m and a. It is to capitalize the business to be able to do all those things. It is to leverage the reality and inherent network effects of the business.

We will continue to do more of that. We will raise a significant amount of capital, um, which I'm eager [00:56:00] to share with everybody to make sure we can keep the PACE of innovation up. While improving all the existing technologies, we are not luxury free. There's plenty of places the user experience could be snappier.

Um, the front end technology constantly changes. I wanna move out to, you know, the best and most beautiful UIs have a great native digital mobile experience. So I think you, that means. You have to have innovation, which is about market expansion, segment expansion, and new features. Um, ESG is very dynamic.

We're getting new standards, new regulations all the time, but you have to take care of the core. You have to feed the existing customers with great security. You know, we're going through SOC to this not glamorous stuff, but that's the responsibility I think of being a good business. Um, we are an extremely swift growth curve.

We can take this business to a public outcome. [00:57:00] And I think that it's important that our customers, investors know that that's a north star for us. Because one of the great years I hear from, uh, customers and perspective customers is, are you gonna be around for me? Mm-hmm. , what's been around since the eighties?

People know they're gonna be there. I think that when you work with startups, although, you know, I'm probably say we're here 10 years now. That people still worry. Are you gonna go away tomorrow? The markets are gonna be tough. Do you have the cash? Do you have investor base? So I work really hard to make sure our customers know that we are extremely well resourced, we're backed by Salesforce and s and p Global and Energy Impact Partners.

And that way, um, we can be a partner in scaling and continue to innovate for the next 10 years. Awesome.

[00:57:52] James Dice: Awesome. All right. My last question been

[00:57:54] Matt Ellis: grilling you. Thank

[00:57:55] James Dice: you for, I thought you said that last question. Sorry. This is the, it's a, it's a more [00:58:00] fun, personal, bigger picture question, not related to technology, totally related to technology, but, uh, it's my last question always.

What's one link that you can share or maybe to, uh, of a book, podcast, TV show, movie. Uh, whatever that you just think you know, has a big impact on you or has had a big impact on you that you'd like to share with the audience? Huh? Well, I,

[00:58:25] Matt Ellis: so you kindly prepared me for this and I admitted that like the, the place that businesses cost me is like my social life and my pop culture.

So like, I don't have any TV shows to recommend movies to go see, um, all rest. But I can offer, I told you I would put up and promote. Of course, I wrote a book. Take a least a look at the first, uh, chapter, which is written by Dave Poe, former Global Head of Sustainability at c Bre. Cool. In that book, uh, you have one of the sort of key figures in this movement from green to esg, and what that story is, is a [00:59:00] story of mentorship and partnership.

For me to grow up in this industry with a guy like that, um, helping and looking out is something I would want for any entrepreneur, and it's something that I would ask every customer and every investor to just remember the human relationship that we have. So that's, uh, that book. Then there's, um, a book that an venture gave me, which is called, uh, The Billionaire Who Wasn't, and it's a story of, it's, I think it's Curtis.

Don Curtisy, Deans the right last name for sure, uh, who gave away fortune. And they an unbelievable story of how and why he went about doing that. And nobody knew. Nobody knew about it. That's awesome. A billionaire who wasn't, Check that out for any entrepreneur. A totally humbling, uh, book. So there's my, those are the two that I can.

That's awesome. Well, thank you Matt.

[00:59:53] James Dice: Uh, thanks for coming on the show. It's been fun to catch up again and, uh, hear what everything,

[00:59:58] Matt Ellis: everything you're working on. Thanks for [01:00:00] talking about the businessman, James. Good to see you.